Responding to the challenge of skills shortages - Employers face a double skills challenge; their recruitment has a 50% chance of hitting problems, while almost two million of their current workers are under-skilled. These stark findings come from the largest-ever study of the skills problems that confront organisations, which was carried out for the Government late last year. It involved contacting over 30,000 workplaces in England to investigate in depth their experience of issues related to skills supply. Our article, based on its findings, analyses the extent of skills shortages, the typical skills that are in short supply and the business impact of such shortages. We also examine evidence about skill gaps within existing workforces, the skills involved, and, crucially, the ways in which employers are attemptmg to resolve skills shortages and skill gaps.